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Monday, December 19, 2011

The decline of Christmas tree sales

This Wall Street Journal piece is interesting on a couple of levels. One, it's about the sale of Christmas trees, which is vital to N.C.'s economy. Secondly, it references research being conducted at N.C. State University, where they are attempting to create the "perfect Christmas tree."

As sales of live trees decline, Christmas tree growers nationwide are increasingly turning to research and marketing to develop and promote the perfect holiday decoration.

In a greenhouse at North Carolina State University, Christmas tree geneticist John Frampton, tests DNA and blends characteristics of trees from around the world in search of the perfect Christmas tree. "We're trying to find a tree that grows faster, is better quality and has pest resistance," he said.

While about 40 percent of US households, or about 37 million of 94 million homes, bought live Christmas trees in 1991, that percentage declined to 23 percent, or 27 million of 118 million homes, last year, according to the National Christmas Tree Association, a trade group.

The reason is partly demographic. Many baby boomers stop buying live trees as they get older. Many people in their 30s and 40s never developed the habit, having grown up in split households or sometimes with artificial trees.

"I don't want to be all doom and gloom because nobody wants to hear that," said Rick Dungey, spokesman for the National Christmas Tree Association. "But we as an industry have some big challenges."

And when consumers do buy real trees in today's tough economy, they're opting for shorter, less expensive ones -- often four feet or smaller -- which are less profitable for growers.

At the same time, sales of artificial trees made in China have skyrocketed, thanks to quality improvements and other demographic shifts, as many city dwellers opt against the hassle of hauling, maintaining and recycling a live tree.

Consumers will spend about $1.01 billion on artificial trees this year, compared to $984 million on real trees, according to a recent Nielsen survey conducted for the American Christmas Tree Association, which represents artificial tree retailers.

To combat the tough headwinds, growers are putting more of their own money into Christmas tree marketing and research, often on their own farms.

Christmas tree growers are a diffuse bunch, ranging from Pacific Northwest magnates to mom-and-pop shops in the Carolinas. But the growers surveyed by the National Christmas Tree Association said they were willing to pay a 15-cent tax per tree for a coordinated marketing and research program, similar to "Got milk?" for the dairy industry.